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On-prem AI in regulated industries: the actual constraints

'We'll just run an open-source model on-prem' is the wrong starting point. The real constraints aren't OSS vs cloud.

datalabz · May 10, 2026

[PLACEHOLDER ESSAY] Stub from the launch shortlist (see content/03_thinking.md). Optional for launch — write only if finance is a committed vertical direction.

Thesis

“We’ll just run an open-source model on-prem” is the wrong starting point. The real constraints are data residency, audit trail, MNPI handling, model-update cadence, and vendor risk reviews — none of which the OSS-vs-cloud framing addresses.

Outline

  1. The pitch that keeps showing up: open-source weights, on-prem cluster, problem solved.
  2. The five actual constraints — each gets a section.
  3. The decision matrix that survives a compliance review.
  4. A short, honest read on where the boundary genuinely lies between cloud, hybrid, and on-prem for finance use cases.
  5. What we’d build first if asked tomorrow.

Stub published 2026-05-10. Replace before launch — or drop if finance vertical commitment slips past v1.